Vacant or Occupied as Seller?
By Charles TurnerSome stats from RMLS:
Area 143 (Southeast Portland). I use 143 because there is a wide range of properties in all price ranges.
Currently 770 active properties listed as vacant. 196 vacant properties sold in last 30 days. Ratio 25.4%
Currently 486 active properties listed as owner occupied. 129 sold last 30 days. Ratio 26.5%
Fifteen properties sold as tenant occupied; 92 currently listed. Ratio 16.4%
Of the 1348 active listings:
57% are vacant
36% are owner occupied
6% are tenant occupied
Of the sold in the last 30 days:
57% were vacant!!!
38% we owner occupied
4% were tenant occupied
What this tells me is that there is little difference between being vacant or owner occupied but tenant occupied houses don’t do well in the market place. There is a big difference between owner occupied cluttered and vacant staged, we just have no empirical evidence to prove it.
Perhaps you should look at the average time it took to sell a home in each category. For instance, Vacant properties sold in the last 30 days averaged “x” days on market while owner occupied properties sold averaged “y” days on market. This might demonstrate the impact of “staged” properties through a shorter sales period.
Got any data on vacancy rates in general in the PDX metro area? I mean, how many houses/condos are sitting empty currently whether they are for sale or not. Nationwide the number is 2.8% which is historically high. Just curious what that number is here. Oh, and for condos the number is 11% vacant nationwide. Yep, that’s a lot.
So of the 57% empty that you show above it seems that there are two options:
1) They’ve already bought and moved into their next house.
2) They’ve moved into a rental so that the place is empty for showing.
Any idea what the breakdown is between #1 & #2?
That would be a case where a buyer might want to know what the situation is. The seller wouldn’t want to or be able to pay two mortgages for very long, I suspect – well, that is if they still had a mortgage on the house being sold (another tidbit of info that a buyer would like to know – maybe you can tell by the desperate look in their eyes or the lack thereof
Oh, almost forgot: Regarding that breakdown between situation #1 & #2 in my previous post…
In the case of #1 a buyer would really like to know when the house was last purchased and for how much. That would give the buyer a really good idea about how much the seller is paying on the mortgage on the place they’re selling. The more recent the purchase, the higher the monthly payment and the more likely that the seller needs to sell pretty quick.
…and all of that info is now readily available.
Interesting statistics. I have been surprised how many homes for sale in my neighborhood look empty. How do these stats compare to 1 year ago? 5 years ago?
Tip, I would venture another reason for vacant properties –
3) They’ve never lived there. It was purchased as an investment or flip.
TIP, in defense, what you are describing is more strategy on making an offer on a house rather than the value of the house. The knowledge of someone’s current status in life is not in itself an indicator of value.
I had a condo that was vacant because I had to move for work. Did that fact decrease the value of the condo because it was vacant? Hardly. Would I accept a price lower than the value? Maybe, depending on what my target price was and what the buyer was willing to spend.
An arms-length transaction is the best indicator of market value. Firesales, bancruptcies, and quick sales are not.
Of course, if the market is going down, it’s going down. My condo didn’t sell for months because the market hit a major flat snag, and not because it was vacant. Being a corner top floor unit with a view unfortunately didn’t help me.
Value is probably one of the least useful concepts to use when talking about markets. You can argue all day about how value is high while prices are low, but in the end, the only thing that matters is price. Market transactions occur on prices, not values. Why not make things simpler and just talk about price?
Great article by the way, do you know of any good stat analysis companies for the Portland area for the local IDX market?